Germany’s eurozone dilemma: should they stay or should they go?

As the euro continues to dance on the brink of calamity, the people responsible for the deepening debacle have finally come up with a scheme that will save it once and for all. It’s a cunning plan that draws heavily on that old joke about a European heaven and hell. You’ll be familiar with it: in heaven the police are British, the cooks are French and the engineers are German; while in hell, the police are German, the cooks are British and it’s all organised by the Italians.

The euro version goes like this: fiscal policy is run by the Greeks, the Spanish and the Italians; interest rates are set by a central bank in thrall to politicians in France and Italy, and it is all organised by a Portuguese socialist and a Belgian. The idea will go down a treat in places like France, Greece and Portugal. But if you’re German — an increasingly disgruntled citizen of Europe’s largest and most productive economy — you might be starting to think it represents a final signal to get the hell out of there.

I exaggerate, of course. The EU summit is destined to break up without any firm plan being agreed. The hope in European capitals is that the E750 billion bailout plan announced early last month will provide enough sticking plaster to get them through the next few months and perhaps into some kind of tolerable recovery.

But it’s a forlorn hope. The euro continues to plummet on foreign exchanges. This week all eyes are on Spain, where investors are betting a Greece-style bailout is coming down the tracks. As various disaster scenarios are pondered, a consensus is forming among moneymakers and policymakers: the euro, in its current form, cannot survive.

There are only two ways out of this bind: forward or back, more Europe or less.